Westminster’s spending review has been welcomed by business and housing leaders as a major opportunity to drive Britain’s economic recovery, unlock regional growth and support long-term investment. From affordable housing and transport upgrades to business finance and infrastructure, the review contains a series of big-ticket commitments designed to reshape the UK economy. But alongside the optimism, there is a clear warning: ambition alone will not be enough.
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One of the centrepieces of Chancellor Rachel Reeves’ multi-year review is a £39 billion commitment to affordable housing across England between 2026 and 2036, to be delivered through the Affordable Homes Programme.
Housing leaders say the announcement could mark a significant turning point. Tracy Harrison, chief executive of the Northern Housing Consortium, described it as a “significant milestone” and welcomed recognition that “one-size-fits-all solutions don’t work for the North”. She said the sector hopes the programme will provide enough flexibility to replace homes that no longer meet community needs. However, she also warned that this alone would not solve the North’s wider regeneration challenge, with more than 126,000 social housing homes reaching the end of their life.
The Government plans to increase the British Business Bank’s financial capacity to £25.6 billion, a move that has been welcomed by business leaders as one of the clearest signs in recent years that ministers are prepared to back wealth creation and enterprise.
Alex Fenton, partner at FBX Capital, said the review showed Rachel Reeves was beginning to recognise what growing businesses need. He pointed to the extension of the Growth Guarantee Scheme and the increased £2 million cap as evidence that the Government understands businesses need both funding and time to generate returns.
The review also includes other major spending commitments, including a boost to the NHS day-to-day budget, an expansion of free school meals to around 500,000 more children, and support for Suffolk’s Sizewell C nuclear power plant.
The Government has pledged billions for transport projects beyond the capital by 2031, including a Tyne and Wear Metro extension, an upgrade to the Transpennine rail route and support for the reopening of Doncaster Sheffield Airport.
Martin Tugwell, chief executive of Transport for the North, welcomed the extra investment and said he was looking forward to seeing how Northern Powerhouse Rail would progress. He said the North’s economy has long been held back by “creaking Victorian rail infrastructure” and that investment in new capacity is overdue.
Karim Fatehi, chief executive of the London Chamber of Commerce and Industry, said the capital risks are being left short on critical transport, policing and affordable housing support. Although he welcomed the Government’s wider commitment to infrastructure and growth, he warned that the review could fall short of what is needed to protect London’s position as a global economic powerhouse.
The review includes support for Heathrow Airport expansion and a four-year funding settlement for Transport for London. Even so, Fatehi argued that without stronger backing, there is a real risk of weakening not only London’s progress but also the UK’s wider international competitiveness.